Does A Credit Card Issuer Know What Items You’re Purchasing?

Question:

I purchase a lot of Vanilla Reloads with my credit cards to increase my manufactured spending and get more points for a trip I’m planning on taking. I’ve heard that it may be possible for the credit card issuer to see that I’m only purchasing Vanilla Reloads from CVS and not actual pharmacy products. Is this true and am I at any risk of having my card terminated because of it?

Answer:

Credit card companies receive four different levels of data currently:

• Level One Data: Typical consumer data such as amount of transaction, the time and date the transaction was processed. Cardholder generally using a personal credit card issued from a US bank. Can be processed with a standard credit card machine or PC processing program.
• Level Two Data: Cardholder generally using a corporate or business credit card. Can be processed with a standard credit card machine or PC processing program.
• Level Three Data: This level is also known as line item detail, the same information that is found on an itemized invoice is communicated. Cardholder generally using a corporate or government credit card. Requires a special credit card machine or additional PC processing software.
• Level Four Data: Also known as bespoke data. This contains specialist information that is captured and delivered outside of level three. Not much is known or published about this data type.

Table Of What Data Each Level Includes:

Data Type	Level 1	Level 2	Level 3
Merchant Name	Yes	Yes	Yes
Transaction Amount	Yes	Yes	Yes
Data	Yes	Yes	Yes
Tax Amount	No	Yes	Yes
Customer Code (16 Char)	No	Yes	Yes
Merchant Postal Code	No	Yes	Yes
Tax Identification	No	Yes	Yes
Merchant Minority Code	No	Yes	Yes
Merchant State Code	No	Yes	Yes
Item Product Code	No	No	Yes
Item Description	No	No	Yes
Item Quantity	No	No	Yes
Item Unit of Measure	No	No	Yes
Item Extended Amount	No	No	Yes
Item Net / Gross Indicator	No	No	Yes
Item Tax Amount	No	No	Yes
Item Tax Rate	No	No	Yes
Item Tax Identifier	No	No	Yes
Item Discount Indicator	No	No	Yes
Ship from Postal Code	No	No	Yes
Freight Amount	No	No	Yes
Duty Amount	No	No	Yes
Destination Postal Code	No	No	Yes
Destination Country Code	No	No	Yes
Alternate Tax Amount	No	No	Yes

Table courtesy of Evolve Systems, this table is a guide only. Level 2 and level 3 data may contain less or more information.

Why Do Merchants Give Out Level 2 & 3 Data?

There are a few reasons as to why merchants give credit card issuers

• Reduced payment times: Merchants typically have to wait between 30 and 60 days to receive funds from credit card transactions. If they provide level 3 data, they can have these funds released as soon as the next business day.
• Lower credit card processing fees. Because level 2 and 3 data is usually reserved for business, commercial and government credit cards they can receive a lower card processing fee when providing level 2 and 3 data. That’s because fraud and chargebacks are far less (and thus costs are lower) than when compared to consumer transactions.

So Am I At Risk Of Having My Credit Card Closed?

As far as we are aware, level two onward is really only for business, corporate and government credit cards. If you’re using a personal card you shouldn’t have any issue. Credit card companies will need to receive level three data to be able to see exactly what items you purchased, so you should be in the clear.

That being said, if the only purchases you’re making at $503.95 from CVS (the maximum load amount is generally $500 and there is a fee of $3.95) using a card that gets a high cash back from CVS it’s going to be obvious to anybody looking at your account what you’re doing.

[Read: Best Drugstore Credit Cards]

You should add in some regular expenses at locations other than CVS and make regular purchases (such as any prescriptions needed) to make it less obvious to any prying eyes.